statement of performance expectations

NEW ZEALAND SYMPHONY ORCHESTRA TE TIRA PŪORO O AOTEAROA

G.69

STATEMENT OF PERFORMANCE EXPECTATIONSFOR THE YEAR ENDING

31 DECEMBER 2015

v

TO OuR NZSO SuPPORTERS:

*Current musicians with the NZSO. For more information on how you too can become a NZSO Supporter visit www.nzso.co.nz

Thank you.

Maestro Circle ($10,000+)Denis & Verna Adam Stephen & Julie Bell-BoothDonald & Susan BestPeter Biggs CNZM & Mary BiggsSir Roderick & Gillian, Lady Deane Peter & Carolyn DiesslThe FAME TrustBronwen Holdsworth ONZM

JBWerePaul McArthur & Danika CharltonMary Fitzwilliam AwardJulie NevettAnonymous Virtuoso Circle ($5,000+) Julian & Selma ArnholdRex BensonMarie & Brendan Brown Holdsworth Charitable TrustInfinity FoundationDr Hylton LeGrice &

Ms Angela Lindsay Collin Post & Brenda YoungRoger Taylor MNZM & Catherine TaylorThe Wallace FoundationAnonymous (3)

Orchestra Circle ($2,500+) H. B. AngusAPRA AMCOSTed & Ann AspeyPaul & Sheryl Baines Lisa Bates & Douglas HawkinsBlue Sky Community Trust Virginia BreenAllison & Victor DiemDiana Duff-StanilandEastern & Central Community TrustPenelope England & Wendy LeeBill & Olive FalconerFehl Charitable TrustInvercargill Licensing

Trust FoundationMainland FoundationNikau FoundationPelorus TrustRotorua Energy Charitable TrustPeter & Juliet RoweLes Taylor QCMargaret TrotterAnonymous

Artist Circle ($1,000+) Ron & Joan AdamsOdette Alleyne (née Outtrim)

& Alan EvansGeoff & Vivien AtkinsonAnita BanburyMark BarrowMargie Beattie & John BarlowThe David & Genevieve

Becroft FoundationJohn & Donna Bennett

Alan & Sandy BulmerJohn Burton Molly ChapmanYvonne ChetwinCommunity Trust of SouthlandMark De JongAlfie & Susie Des TombeMargaret DoucasChristopher DownsMichiel During & Cathy FergusonWaltraut & Dieter EngelIan Fraser Ian Fraser & Suzanne SnivelyLaurence GreigDr John GrigorRobin HendersonAntonia HillProf Les HolborowTomas & Jan HuppertDr Lynnette Jones and Deborah MillsMorgan & Patricia JonesFenton & Felicity KellyAnnette & Ralph LendrumDavid Lord & Tracy Grant LordIan MacalisterPiera McArthurClaire McDonaldJennie McInnesAthol & Ngaire MannMargaret & Huia Clarke TrustChristopher & Jilly MarshallPatricia Morrison QSM

Alison MortonMike Nicolaidi & Michael HoustounTim & Lorraine OlphertOtago Community TrustFay PankhurstRev Dr Barbara PeddieRoss & Judith PottingerGillian RobertsAilsa SaltSue Scott & Peter WeddeKen Sheldrick Heather SimpsonGendie & Richard Somerville-RyanMartin & Catherine SpencerAlison ThomsonKen & Mary ThomsonDame Catherine TizardAnn TrotterA R. (Bob) WallisMichael & Margaret WallsPeter & Kathryn WallsDavid Weatherburn & Maxine DixonCarla and John Wild Tim Wilkinson & Lynette MurdochDavid & the late Helen ZwartzAnonymous (10)

Sonata Donor ($500+) Jack & Elizabeth AlisonMary AllisonJean AtchinsonLeslie Austin

Michael & Judith BassettPhilippa BatesUsha BhanaPatricia BollardHugh & Jill BrewertonJenny BrownMary E BrownAlison Buchanan & Eric JohnstonAdrienne BushellRobert & Penney CameronRobert CarewMalcolm & Margaret CarrNoel CarrollAngela Caughey Stuart & Lizzie ChartersDion ChurchJeremy Commons & the late

David Carson-ParkerJanet CookePrue CotterRichard & Valerie CrooksJane CrosseTania DyettJoan DykesStephen & Virginia FisherSas FookesElizabeth FosterGerrard & Marti FriedlanderBryan Frost Ruth & Peter GadgilMyles GazleyMichael & Creena GibbonsGarry & Susan GouldCliff HartIan & Wendy HaynesDr Graham Hill & Joan CaulfieldDon & Janine HunnPietari Inkinen (NZSO Music Director)Geoff & Elizabeth Lee Joanna Leighton Jones & Roger GillHoward LivingstonBarbara MabbettMargaret MabbettAnn MallinsonJim MannCarole McIntoshBruce McKinnon*Jeff & Marise McNeillGlenda & Peter MenziesShinji & Keiko MorimotoRoger & Jenny MountfortKim & Ian NewHilary PattonGeoff Pearce and Sandra McKieAlan & Luba PerryGlennis, Lady Pettigrew Phillippa Poole & Paul GilkisonTony ReevePaul Ridley-Smith & Felicity WongJohn & Helen RimmerMiles RogersJudith RossMarcus & Eve RudkinSeaway Cleaning Services Ltd

Warwick SlinnRobyn SmithTrevor SmithPeter & Kay SquiresRuth Thomas Jasmine & Kevin ThompsonHugh & Marion TownendJudith TrotterJohn & Susan Upton Waitaki District CouncilVivien WardFrank WebsterPeter & Jane WebsterRudolph & Valeria WenkJoan WilkinsonDr Alan WrightAnn WylieNicola YoungAnonymous (17)

Vincent Aspey Society (Notified Legacies) Leslie AustinMurray Eggers D J Foley Maggie HarrisEric Johnston & Alison BuchananAnna Marion Shar MilesMary O’BrienMr RobinsonPeter & Juliet RoweKeith L StichburyAnonymous (11)

(Realised Legacies 2007–2014)Mrs Ursula BayfieldPeter BrooksJudith ClarkWilliam ClaytonFrederick CoadJoan DingleyMargaret EvertonThe FAME TrustMary Fitzwilliam Valerie & Kelvin GrantAllan Silas JenkinsZita Outtrim Erika Schorss

Endowed FundsJune Violet Commons FundEmma & Jack Griffin Charitable TrustReeves Harris Orchestra FundMichael Monaghan Young

Musicians FoundationTake Note Trust

nzso.co.nz 1

CONTENTS

2 STATEMENT OF PERFORMANCE EXPECTATIONS

PART ONE4 ASSESSING PERFORMANCE AND SUCCESS

6 PERFORMANCE FRAMEWORK

7 IMPACTS & OUTCOMES

PART TWO8 FORECAST OUTPUT SERVICE PERFORMANCE

10 MEASUREMENT OF QUALITY SERVICE PERFORMANCE

11 STATEMENT OF FORECAST COMPREHENSIVE REVENUE AND EXPENSE

12 STATEMENT OF FORECAST FINANCIAL POSITION

13 STATEMENT OF FORECAST MOVEMENTS IN EQUITY

13 STATEMENT OF FORECAST CASH FLOWS

14 NOTES TO THE FINANCIAL STATEMENTS

2

This Statement of Performance Expectations reflects NZSO’s proposed performance targets and forecast financial information for the year ahead. It is produced in accordance with Section 149E of the Crown Entities Act 2004.

The forecast financial statements and underlying assumptions in this document have been authorised as appropriate for issue by the Board of New Zealand Symphony Orchestra in accordance with its role under the Crown Entities Act 2004. It is not intended to update the forecast financial statements subsequent to presentation.

STATEMENT Of PERfORMANCE ExPECTATIONS

Donald BestBoard Chair

25 November 2014

Roger TaylorBoard MemberChair of Audit Committee

25 November 2014

nzso.co.nz 3

This is the first Statement of Performance Expectations (SPE) prepared by New Zealand Symphony Orchestra (NZSO). This document provides information directly associated with the performance targets which we have set for the year ending 31 December 2015. All information is provided in accordance with the Crown Entities Act 2004. Results of performance against these targets and also against the longer term goals set out in our Statement of Intent will be provided in our Annual Report which will be published by 31 March 2016. Interim results may also be provided on the Publications page of NZSO’s website during 2015.

This Statement of Performance Expectations is provided in two parts:

PERFORMANCE ASSESSMENT AND ANNuAL ExPECTATiONS

The forecast statements in this section provide performance measures and targets for the year ending 31 December 2015 in accordance with the Crown Entities Act in relation to our Orchestral Services outputs. This section explains how our activities contribute to longer-term Outcomes noted in the Performance Framework. As shown in this framework, the three Outcome areas and services we deliver work collectively to contribute to the overarching goal and support the Sector Vision. This section begins with laying out the Functions and Objectives of the NZSO as legislated as well as the NZSO’s Vision, Mission and Values.

FORECAST FiNANCiAL STATEMENTS

The forecast financial statements provide all appropriate information and explanations needed to fairly reflect the forecast financial operations and financial position of NZSO for the year ending 31 December 2015 in accordance with Section 149G of the Crown Entities Act 2004.

4

ASSESSING PERfORMANCE AND SuCCESS

PART ONE

There are many ways to assess performance and define and measure success. The NZSO is governed by legislation and is also a member of a large and diverse cultural sector. These two factors are the critical elements in building an appropriate performance framework for the Orchestra and then establishing measures which demonstrate progress using an “investment-to-outcomes” type model. Success to the NZSO means achieving excellence in the delivery of the Functions of the Orchestra, as defined in Section 9 of the New Zealand Symphony Orchestra Act 2004 (“the Act”) and in meeting the Objectives of the Orchestra outlined in Section 8 of the Act. In doing so, the NZSO will contribute to the cultural sector’s Vision and Outcomes.

New Zealand’s national orchestra has been performing music at the very highest levels for nearly seventy years. The New Zealand Symphony Orchestra (NZSO) was established as an autonomous Crown entity on 6 April 2004 by the Act. Prior to this, the Orchestra was a crown-owned limited liability company from 1998-2004 and before that, from its establishment in 1947 until 1998 was part of New Zealand’s various broadcasting agencies - New Zealand Broadcasting Service (NZBS), New Zealand Broadcasting Corporation (NZBC) and Broadcasting Corporation of New Zealand (BCNZ). The continuous pursuit of excellence in performance is a critical determinant of our core business of symphonic music making. Organisational excellence is the key to its achievement.

While the NZSO has a single Output Class (Orchestral Services), there are a wide variety of distinct activities and services (outputs) undertaken each year. Key output measures are grouped by the Objective they relate to from the Act. Each of these outputs also contribute towards one of the NZSO’s three Outcome areas; Quality, Coverage and Development.

In addition to delivering on the Functions and Objectives of the Act, the NZSO is also contributing (along with other New Zealand orchestra’s) to the full implementation of the recommendations of the New Zealand Professional Orchestra Sector Review (OSR) published by the Ministry for Culture & Heritage in February 2013, available here: http://www.mch.govt.nz/fi les/New%20Zealand%20Professional%20Orchestra%20Sector%20Review%20Final%20Report%20(D-0466809).PDF).

FuNCTiONS OF ThE ORChESTRA

The functions of the orchestra are outlined in Section 9 of the New Zealand Symphony Orchestra Act 2004, as follows:

• toensurethattheorchestrapresentsabroadrepertoireoforchestral performance including New Zealand works and recent works

• toencouragethedevelopmentofNewZealandmusicians• toencouragethedevelopmentofNewZealanders’

knowledge and appreciation of orchestral music• todevelopandexpandtheaudienceoftheorchestraona

national basis • toprovideatouringorchestra(whichmayalsoinclude

international performances)• tocarryoutanyotherfunctionsconsistentwithits

principal objectives, as agreed to by the Minister after consultation with the orchestra

• toco-operatewithothersimilarinstitutionsandorganisations having objectives similar to those of the orchestra.

OBjECTiVES OF ThE ORChESTRA

The objectives of the orchestra are outlined in Section 8 of the New Zealand Symphony Orchestra Act 2004, as follows:

• toprovidethepublicofNewZealandwithliveandrecorded performances of symphonic music performed to an international standard:

• toprovideanorchestrathat—• (i)ishighlyskilledandartisticallyimaginative;and• (ii)hasstrongcommunitysupport:

• tobealeadingNewZealandperformingartsorganisationwith a role in the development of a distinctively New Zealand cultural environment:

• topromoteandencourageNewZealandmusicalcomposition and composers:

• toprovideperformanceopportunitiesforNewZealandmusicians, whether as members of the orchestra or as soloists.

nzso.co.nz 5

ThE VISIONProviding world class musical experiences

that inspire all New Zealanders.

ThE MISSIONDeepening and expanding musical connections

and engagement with our communities.

A NATIONAl FullTIME Full SIzE SyMPhONy

ORChESTRAwhich

Performs to an international standard

is

Excellent in performance

has

Relevant and engaging programming, Reaches large and diverse audiences

and asserts

Musical and artistic leadership.

A symphony orchestra which has

Best practice operations,A shared and productive organisational culture,Sustainable

management of all resources

and

Excellent systems and processes.

achieved by

through

NZSO VALuES NZSO ViSiON AND MiSSiON

WhAT WE dO

We value excellent engagement

• We identify strongly with one another and with New Zealanders.

• We ensure that our work is relevant to our audiences

• We communicate openly and honestly with one another and with New Zealanders

hOW WE dO

IT

We value creative excellence

• We are passionate about our music and strive to share it widely

• We are innovative and creative in all aspects of our activities

• We are inspired to be excellent in all our performances

hOW WE

bEhAVE

We value excellent relationships

• We always act with fairness, honesty and transparency

• We trust, respect, acknowledge and support each other

• We always act with integrity

6

Government Funding for the NZSO’s ongoing expenditure is provided through Vote: Arts, Culture and Heritage for the Output: Performing Arts Services. The Output is described as “providing opportunities for New Zealand audiences to experience high quality live symphonic music…and encouraging participation in and appreciation of the art form in New Zealand”.

The NZSO’s specific performing arts service is Output: Orchestral Services. Orchestral services are provided either as live performance (to a public or private audience) or are recorded for distribution through a wide variety of mediums. This may include radio broadcast, digital download, streaming, CD, film soundtrack and more. Orchestral Services is the only Reportable Class of Output of the NZSO and all financial and

PERfORMANCE fRAMEWORK

New Zealand’s distinctive culture enriches our lives

QuALiTY(Engage & Excel)

New Zealanders inspired by high quality symphonic music

• Audience surveys rate NZSO performances as high quality

• Reviews of recordings rate NZSO performances highly

(Quality Service Performance targets are on page 10)

COVERAGE(Engage)

DEVELOPMENT(Create & Preserve)

NZSO Outputs Orchestral Services

Organisational health & Capability

NZSO players perform at outstanding levels

NZSO operating income is sufficient to deliver a full

calendar of quality artistic programmes

NZSO has a strong, positive image with

stakeholders

Sector Vision

NZSO Vision

Preserve: Our heritage can be enjoyed by future generations

World-class musical experiences that inspire all New Zealanders

Targets

Create: Cultural activity flourishes in

New Zealand

Engage: Engagement in cultural activities is

increasing

NZSO Outcomes

Manatū Taonga / M

inistry for Culture &

Heritage (sector)

New

Zealand Symphony O

rchestra (external)

Sector Outcomes

New Zealanders have ready access to symphonic music

• Audiences for NZSO performances continue to grow

• NZSO performances engage with audiences from more communities

(Service Performance targets are on pages 8 and 9)

New Zealanders create new symphonic music

• New New Zealand works are created and performed

• New New Zealand student compositions are created and workshopped

(Service Performance targets are on pages 8 and 9)

NZS

O Im

pact

Indi

cato

rsN

ZSO(internal)

We value excellent engagement. We value creative excellence. We value excellent relationships.

NZSO Values

Excel: Artists and organisations achieve

excellence

non-financial performance measures in this Statement of Performance Expectations are directly related to this one Output Class.

The NZSO’s performance framework, below, shows how the range of our activities link to that of the wider cultural sector in supporting and developing New Zealand’s distinctive culture and enriching lives. The NZSO does this through three outcomes sought from the orchestral services it provides.

The NZSO has determined six impact indicators which suggest that progress is being achieved toward the outcomes sought and specific impact measures are assigned to each. The 2015 targets for these are shown in the shaded budget column of the succeeding “Impacts & Outcomes” table.

nzso.co.nz 7

From the Performance Framework described on the previous page, the NZSO has determined specific, identifiable measures which it is believed will demonstrate progress towards the three defined Outcomes under the headings Quality, Coverage and Development. For each identified measure a budget target

IMPACTS & OuTCOMES

OuTCOME: Quality New Zealanders inspired by high quality symphonic music

impact indicator impact measure2015

Budget2014

Projected2013

Actual2012

Actual

Audience surveys rate NZSO performances as high quality

Average grading achieved for quality of performance in surveys of NZSO audiences

9 / 10 9 / 10 9 / 10 9 / 10

Reviews of recordings rate NZSO performances highly

Average grading achieved for NZSO recordings released and reviewed

9 / 10 9 / 10 9 / 10 9 / 10

Outcome: Coverage New Zealanders have ready access to symphonic music


Budget2014

Projected2013

Actual2012

Actual

Audiences for NZSO performances continue to grow

Total audience attendances for NZSO performances

105,000 101,352 101,000 93,808

NZSO performances engage with audiences from diverse communities

Total number of communities represented in NZSO audiences for live performances *

26* 32 67 44

OuTCOME: Development New Zealanders create new symphonic music


Budget2014

Projected2013

Actual2012

Actual

New New Zealand works are created and performed

Number of new New Zealand works performed by NZSO **

4 3 4 10 **

New New Zealand student compositions are created and workshopped

Number of new New Zealand student compositions workshopped by NZSO

10 10 9 8

* A recommendation of the New Zealand Professional Orchestra Sector Review (OSR) was that the NZSO is not required to tour to centres with populations fewer than 50,000. There are only 13 such centres in New Zealand, but audiences from other communities do travel to these larger population bases to experience NZSO performances. The NZSO’s response to this OSR recommendation is the reason for the decline in this measure in 2014 and 2015 as the OSR recommendations are implemented.

** The 10 works performed in 2012 included 8 new works premiered in a special concert collaboration with the Royal New Zealand Ballet. All 8 works were student compositions which had been previously workshopped by NZSO.

has been set for 2015. In the following table these 2015 budget targets are shown alongside the projected result for that target in the 2014 year and the actual results achieved for the 2013 and 2012 years.

8

The following table details specific, identifiable Orchestral Services output targets for each Objective of the NZSO (as defined in Section 8 of the New Zealand Symphony Orchestra Act 2004). Each output is also directly related to one of the specific outcomes that are identified in the performance framework (NB. The measures for Performance Quality are on

fORECAST OuTPuT SERVICE PERfORMANCE

the succeeding table). In addition to these Orchestral Services output targets, the NZSO has agreed some additional targets with the Ministry for Culture & Heritage which are shown at the end of this table. These targets relate to recommendations of the New Zealand Professional Orchestra Sector Review.

NEW ZEALAND SYMPhONY ORChESTRA ACT 2004 – SECTiON 8

SPECiFiC OBjECTiVES OuTCOME

FORECAST OuTPuT SERViCE PERFORMANCE

2015 BuDGET

2014 PROjECTED

2013 ACTuAL

2012 ACTuAL

Detail Summary

Provide the public of New Zealand with live and recorded performances of symphonic music performed to an international standard

Provide quality live performances throughout the country

Coverage At least 62 full-orchestra performances presented throughout New Zealand in 2015 and at least 12 reduced-size orchestra performances. Total performances: 74

62 full-orchestra and 12 reduced-size orchestra performances Total performances: 74




Ensure that as many performances as possible are broadcast

Coverage At least 25 new NZSO performances are broadcast nationally on radio or television in 2015.

25 new performances broadcast




Produce high quality music and film recordings

Coverage At least 2 musical (including film score) recordings are undertaken in 2015.

2 recordings made

4 recordings including 3 for CD and 1 film recording

7 recordings including 2 film recordings, 3 CD recordings, 1 broadcast recording and 1 accompaniment recording.

9 recordings including 2 film recordings, 4 CD recordings and 3 broadcast and archive recordings

Performances are of international quality

Quality Refer separate performance quality measures on Page 11 .

Provide an orchestra that:

– Is highly skilled and artistically imaginative; and

Provide Professional Development opportunities for existing NZSO musicians

Development At least 4 professional development scholarships or bursaries are awarded to NZSO musicians in 2015.

4 scholarships or bursaries




Live performances include a wide variety of programmes

Development Full-orchestra performances presented in 2015 of at least 19 different programmes and at least 6 different reduced-size orchestra programmes.

19 full-orchestra and 6 reduced-size orchestra programmes




– has strong community support

Live performances reach as many communities as possible

Coverage At least one NZSO performance in 2015 is undertaken in each of the 13 New Zealand centres with populations in excess of 50,000.

13 communities reached with live performances




PART TWO

nzso.co.nz 9

NEW ZEALAND SYMPhONY ORChESTRA ACT 2004 – SECTiON 8

SPECiFiC OBjECTiVES OuTCOME

FORECAST OuTPuT SERViCE PERFORMANCE

2015 BuDGET

2014 PROjECTED

2013 ACTuAL

2012 ACTuAL

Be a leading New Zealand performing arts organisation with a role in the development of a distinctively New Zealand cultural environment

Provide opportunities for the training and development of young and emerging musicians

Development At least 2 NZSO National Youth Orchestra performances, 8 students in NZSO Mentor programme and 10 students in the fellowship programme, 4 master classes with NZSO players or guest artists and coaching of students in 6 New Zealand regional Youth Orchestras is undertaken in 2015.

2 NYO performances 8 mentor students 10 fellowship students 4 master classes 6 youth orchestras coached


4 NYO performances 8 mentor students 4 fellowship students 3 master classes 4 youth orchestras coached TBC


Work collaboratively with other arts and cultural organisations in New Zealand

Development At least 10 performance collaborations with other arts/cultural organisations are undertaken in 2015 (including with Royal New Zealand Ballet, Opera New Zealand and Museum of New Zealand Te Papa Tongarewa).

10 performance collaborations with other arts/cultural organisations

12 performance collaborations with other arts/cultural organisations

Performance collaborations with Royal NZ Ballet, NBR NZ Opera, Capital-E National Theatre for Children and the Museum of New Zealand Te Papa Tongarewa.

Performance collaborations with Royal NZ Ballet, Museum of New Zealand Te Papa Tongarewa, Auckland Choral Society and the NZ International Festival of the Arts.

Promote and encourage New Zealand musical composition and composers

Create workshop opportunities for New Zealand composers

Development At least 8 student compositions are workshopped by NZSO in 2015 and 8 other New Zealand compositions workshopped.

8 student compositions 8 other compositions

10 student compositions



Profile New Zealand composition in public performances and in recordings

Development At least 20 New Zealand works performed in total in 2015.

20 New Zealand works performed

25 New Zealand works performed.



Provide performance opportunities for New Zealand musicians, whether as members of the orchestra or as soloists

Ensure that New Zealand artists perform with the orchestra as often as possible

Development At least 20 New Zealand artists perform with the NZSO in 2015.

20 New Zealand artists perform




fORECAST OuTPuT SERVICE PERfORMANCENew Zealand Professional Orchestra Sector Review, Final Report, February 2013, recommendation 3 That the orchestra sector is encouraged to establish a leadership body to increase collaboration and provide collective representation with central government funders 2015 Budget Output – Actively participate in the production of an annual report of nation-wide orchestral services. 2015 Budget Output – Actively participate in regular meetings of APOA (Association of Professional Orchestras Aotearoa).

10

MEASuREMENT Of quALITY SERVICE PERfORMANCE

One of the Objectives of the NZSO as defined in Section 8 of the New Zealand Symphony Orchestra Act 2004 is “performances of symphonic music performed to an international standard”. The following table sets targets for 2015 to demonstrate NZSO is delivering on this objective.

PROCESS TARGET MEASuREMENT2015 BuDGET

2014 PROjECTED

2013 ACTuAL

2012 ACTuAL

Regular audience surveys are conducted and performance quality is polled.

Audiences recognise NZSO performances are of international quality.

Audience surveys achieve high gradings.

9/10 9/10 9/10 9/10

Increasing audiences for NZSO performances indicate that quality is being achieved.

Audiences recognise NZSO performances are of international quality.

Total audience attendances increase.

105,000 Increasing

101,352 Increasing

101,000 Increasing

93,808

Independent international reviews of live and recorded performances assess quality of orchestra performance.

International reviewers recognise NZSO performances are of international quality.

International reviews achieve high gradings.

9/10 9/10 9/10 9/10

Critical reviews by New Zealand media of live performances assess quality of orchestra performance.

New Zealand reviewers recognise NZSO performances are of international quality.

New Zealand reviews achieve high gradings.

9/10 9/10 9/10 9/10

International artists polled on quality of orchestra and performances (“Exit Polling”).

Artists recognise NZSO performances are of international quality.

Exit polling of guest conductors and soloists achieve high gradings.

9/10 9/10 10/10 10/10

International broadcasters programming of NZSO recordings indicate quality is being achieved.

Broadcasters recognise NZSO performances are of international quality.

Increasing numbers of broadcasts of the NZSO on overseas networks.

10 9 9 6

nzso.co.nz 11

MEASuREMENT Of quALITY SERVICE PERfORMANCE

STATEMENT Of fORECAST COMPREHENSIVE REVENuE AND ExPENSE FOR ThE YEAR ENDED 31 DECEMBER 2015

2015Budget

$000

2014Budget

$000

2014Projected Actual

$000

Government Funding 13,446 13,446 13,446

Interest & Sundry Revenue 448 431 386

Overhead Expenses (incl. Salaries) (12,384) (12,301) (12,208)

Depreciation & Amortisation (160) (170) (148)

Surplus / Deficit before

Orchestral Services 1,350 1,406 1,476

Orchestral Services

Concert Revenue 3,075 3,379 2,780

Sponsorship Revenue 1,710 1,480 1,388

Other Orchestral Services Revenue 58 767 963

Orchestral Services Expenses (6,318) (7,019) (6,594)

Surplus / Deficit from

Orchestral Services (1,475) (1,393) (1,463)

Net Surplus / (Deficit) for the year (125) 13 13

Other Comprehensive Revenue and Expense - - -

Total Comprehensive Revenue and Expense (125) 13 13

OThER iNFORMATiON


Non-Government Revenue 5,291 6,057 5,517

Total Revenue 18,737 19,503 18,963

Government Funding % of Total Revenue 72% 69% 71%

12

STATEMENT Of fORECAST fINANCIAL POSITIONAS AT 31 DECEMBER 2015

2015Budget

$000

2014Budget

$000


$000

Current Assets

Cash & cash equivalents 2,361 2,511 2,124

Investments 500 500 1,000

Trade Receivables & Other Receivables 274 307 307

Prepayments 105 125 125

Derivative Financial Instruments - - -

Total Current Assets 3,240 3,443 3,556

Non-Current Assets

Property, Plant & Equipment 1,080 1,095 1,099

Intangibles 118 62 64

Total Non-Current Assets 1,198 1,157 1,163

TOTAL ASSETS 4,438 4,600 4,719

Current Liabilities

Trade Payables & Other Payables 631 730 736

Revenue in Advance 1,057 1,032 941

Employee Entitlements 1,030 1,125 1,200

Derivative Financial Instruments - - -

Total Current Liabilities 2,718 2,887 2,877

Non-Current Liabilities

Employee Entitlements 198 180 195

Total Non-Current Liabilities 198 180 195

TOTAL LiABiLiTiES 2,916 3,067 3,072

NET ASSETS 1,522 1,533 1,647

REPRESENTED BY PuBLiC EQuiTY 1,522 1,533 1,647

OThER iNFORMATiON

Working Capital 522 556 679 Equity % of Total Assets 34% 33% 35%

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STATEMENT Of fORECAST MOVEMENTS IN EquITYFOR ThE YEAR ENDED 31 DECEMBER 2015

2015Budget

$000

2014Budget

$000


$000

Public Equity at 1 January 1,647 1,520 1,634

Total Comprehensive Revenue and Expense (125) 13 13

PuBLiC EQuiTY AT 31 DECEMBER 1,522 1,533 1,647

STATEMENT Of fORECAST CASH fLOWS FOR ThE YEAR ENDED 31 DECEMBER 2015

2015Budget

$000

2014Budget

$000


$000

Cash Flows From Operating Activities

Receipts from Customers 4,524 5,645 5,110

Interest Received 204 192 186


Payments to and on behalf of employees (10,189) (10,513) (10,277)

Payments to Suppliers (8,053) (8,571) (8,153)

Net Goods and Services Tax - - -

Net Cash Flows From Operating Activities (68) 199 312

Cash Flows From investing Activities

Sales of Property, Plant & Equipment - - -

Purchases of Property, Plant & Equipment (100) (115) (110)

Purchases of intangible assets (95) (35) (40)

Term Deposits > 3 months - - -

Net Cash Flows From investing Activities (195) (150) (150)

NET iNCREASE / (DECREASE) iN CASh hELD (263) 49 162

Add: Cash at beginning of the year 3,124 2,962 2,962

CASh AT END OF ThE YEAR 2,861 3,011 3,124

Represented by:

Cash & Cash Equivalents

Bank 2,361 2,511 2,124

Term Deposits <= 3 months 500 500 1,000

2,861 3,011 3,124

14

NOTES TO THE fINANCIAL STATEMENTS

REPORTiNG ENTiTY

The New Zealand Symphony Orchestra (“NZSO”) is a Crown entity as defined by the Crown Entities Act 2004 and is domiciled in New Zealand.

These prospective financial statements are for the NZSO for the year ending 31 December 2015 and were approved by the NZSO Board on 7 November 2014.

BASiS OF PREPARATiON

Statement of ComplianceThese prospective financial statements have been prepared in accordance with the requirements of the Crown Entities Act 2004, which includes the requirement to comply with New Zealand generally accepted accounting practice (“NZ GAAP”). The NZSO has designated itself as a public benefit entity (PBE) for financial reporting purposes and the prospective financial statements have been prepared in accordance with Tier 2 PBE accounting standards and comply with PBE FRS 42. The NZSO is a Tier 2 reporting entity by virtue of the fact that annual expenditure is greater than $2 million but less than $30 million and NZSO is not publicly accountable. These prospective financial statements for the year ending 31 December 2015 are the first to be prepared by NZSO under new PBE accounting standards. There have been no material adjustments arising on transition to the new PBE accounting standards. The financial statements have been prepared on a going concern basis and the accounting policies set out below have been applied consistently to all periods presented in these financial statements.

Presentation Currency and RoundingThe financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of NZSO is New Zealand dollars.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the Board to exercise judgement in the application of the entity’s accounting policies. Estimates and associated assumptions are based on historical experience and other factors, as appropriate to the particular circumstances.

Significant assumptions used in the preparation of Prospective Financial StatementsThe prospective financial statements have been prepared on the basis of delivering the core 2015 concert season as outlined in the NZSO’s season brochure (which is available on our website here): http://www.nzso.co.nz/wp-content/plugins/page-flip-image-gallery/popup.php?book_id=16

The NZSO’s core business will remain unchanged in 2015 and the Government funding for the ongoing operations will remain at $13.446 million for the year to 31 December 2015. The appropriation for the second half of 2015 will not be confirmed until the Government budget is announced in May 2015. Concert income and sponsorship forecasts are based on models consistent with previous years as are Orchestral Services Expenses, but they are reflective of the specific concert season noted in the brochure. NZSO seasons vary year-to-year both in the number and types of performances and forecasts reflect this. Other Orchestral Services Income (projected as $963,000 in 2014) largely consists of film score recording income and no such income is forecast for 2015.

Critical judgements in applying our Accounting PoliciesIn preparing these financial statements the NZSO has made estimates and assumptions about the future. These estimates and assumptions may differ from subsequent actual results. Estimates and assumptions are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances and, in particular, when estimating the useful life and residual value of property, plant and equipment.

Summary of Significant Accounting PoliciesRevenueThe specific accounting policies for significant revenue items are explained below:

Funding from the Crown (Government funding)NZSO is significantly funded from the Crown. This funding is restricted in its use for the purpose of NZSO meeting the objectives specified in its founding legislation (New Zealand Symphony Orchestra Act 2004) and the scope of the relevant appropriations of the funder. NZSO considers there are no conditions attached to the funding and it is recognised as revenue at the point of entitlement. The fair value of revenue from the Crown has been determined to be equivalent to the amounts due in the funding arrangements.

Contra sponsorship receivedSponsorship revenue can be received by NZSO in cash and/or non-cash (contra) exchange transactions. Revenue is recognised when it becomes receivable except when in the case of contra sponsorship their is a realistic expectation that those sponsored services will not be realised.

Interest revenueInterest revenue is recognised using the effective interest method.

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Provision of services / Concert RevenueServices provided to third parties on commercial terms are exchange transactions. Revenue from these services is recognised in proportion to the stage of completion at balance date. Concert Revenue received for NZSO’s future year performances is Revenue in Advance at balance date and will be fully recognised as Revenue in the financial statements for the year to which the performance relates.

Foreign Currency TransactionsAll Foreign currency transactions (including those for which forward foreign exchange contracts are held) are translated into New Zealand dollars (the functional currency) using the spot exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the surplus or deficit.

Cash and cash equivalentsCash and cash equivalents includes cash on hand, deposits held on call with banks, and other short-term highly liquid investments with original maturities of three months or less.

ReceivablesShort-term receivables are recorded at their face value, less any provision for impairment. A receivable is considered impaired when there is evidence that NZSO will not be able to collect the amount due. The amount of the impairment is the difference between the carrying amount of the receivable and the present value of the amounts expected to be collected.

InvestmentsTerm depositsInvestments in bank term deposits are initially measured at the amount invested. After initial recognition, investments in bank deposits are measured at amortised cost using the effective interest method, less any provision for impairment.

Derivative financial instrumentsDerivative financial instruments are used to manage exposure to foreign exchange risk arising from NZSO’s operational activities. NZSO does not hold or issue derivative financial instruments for trading purposes. NZSO has not adopted hedge accounting.

Property, plant, and equipmentProperty, plant, and equipment consists of the following asset classes: computer hardware, leasehold improvements, musical instruments, studio equipment, furniture and office equipment, and music library. All assets classes are measured at cost, less accumulated depreciation and impairment losses.

AdditionsThe cost of an item of property, plant, and equipment is recognised as an asset only when it is probable that future economic benefits or service potential associated with the item will flow to NZSO and the cost of the item can be measured reliably. Work in progress is recognised at cost less impairment and is not depreciated. In most instances, an item of property, plant, and equipment is initially recognised at its cost. Where an asset is acquired through a non-exchange transaction, it is recognised at its fair value as at the date of acquisition.

DisposalsGains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposals are reported net in the surplus or deficit.

DepreciationDepreciation is provided on a straight-line basis on all items of property, plant and equipment at rates calculated to write-off the cost (or valuation), to their estimated residual value, over their estimated useful lives. Leasehold alterations are depreciated over the remaining period of the lease agreement. The useful lives and associated depreciation rates of major classes of property, plant, and equipment have been estimated as follows:

Leasehold Alterations 3–15 years 6.67% SLComputer Equipment 3 years 33.33% SLStudio Equipment 10 years 10.00% SLFurniture and Fittings 15 years 6.67% SLMusical Instruments – percussion 10 years 10.00% SLMusical Instruments – all others 25 years 4.00% SLLibrary – Music Manuscripts Not depreciated

Intangibles assetsSoftware acquisition and developmentAcquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Costs associated with maintaining computer software are recognised as an expense when incurred. Costs that are directly associated with the development of software for internal use by the NZSO, are recognised as an intangible asset. Direct costs include the software development and directly attributable employee costs. Staff training costs are recognised as an expense when incurred.

AmortisationThe carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each period is recognised in the surplus or deficit. The useful lives and associated amortisation rates

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of major classes of intangible assets have been estimated as follows:

Acquired Computer Software 3 years 33.33%Developed Computer Software 3 years 33.33%

Impairment of Property, Plant and Equipment and Intangible assetsNZSO does not hold any cash-generating assets. Assets are considered cash-generating where their primary objective is to generate a commercial return.

Non-cash-generating assetsProperty, Plant and Equipment and Intangible Assets held at cost that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value will exceed the recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the depreciated replacement costs for the assets. Impairment losses are recognised in the surplus or deficit.

PayablesShort-term payables are recorded at their face value.

Employee entitlementsShort-term employee entitlementsEmployee benefits that are due to be settled within 12 months after the end of the period in which the employee renders the related service are measured based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned to but not yet taken at balance date, deferred and retiring leave (vested and available to be cashed-in) and sick leave. A liability for sick leave is recognised to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that it will be used by staff to cover those future absences. A liability and an expense are recognised for bonuses where there is a contractual obligation and a reliable estimate of the obligation can be made.

Long-term employee entitlementsEmployee benefits that are due to be settled beyond 12 months after the end of period in which the employee renders the related service, such as long service leave have been calculated on an actuarial basis. The calculations are based on:• likelyfutureentitlementsaccruingtostaff,basedonyears

of service, years to entitlement, the• likelihoodthatstaffwillreachthepointofentitlement,and

contractual entitlement information; and• thepresentvalueoftheestimatedfuturecashflows.

Sick leave, annual leave, and vested long service, retiring and deferred leave are classified as a current liability. Non-vested long service leave expected to be settled within 12 months of balance date is classified as a current liability. All other employee entitlements are classified as a non-current liability.

Superannuation schemesDefined contribution schemesObligations for contributions to KiwiSaver, the Government Superannuation Fund, the State Sector Retirement Savings Scheme and the NZSO’s Tower Superannuation Scheme are accounted for as defined contribution superannuation schemes and are recognised as an expense in the surplus or deficit as incurred.

Defined benefit schemesNZSO makes employer contributions to the Defined Benefit Plan Contributors Scheme (the scheme), which is managed by the Board of Trustees of the National Provident Fund. The scheme is a multi-employer defined benefit scheme. Insufficient information is available to use defined benefit accounting, as it is not possible to determine from the terms of the scheme the extent to which the surplus/deficit will affect future contributions by individual employers, as there is no prescribed basis for allocation. The scheme is therefore accounted for as a defined contribution scheme.

EquityEquity is measured as the difference between total assets and total liabilities. There is no basis on which to disaggregate equity and so it is recognised in total as general funds.

Goods and Services Tax (“GST”)These financial statements are prepared on a GST exclusive basis with the exception of trade receivables and trade payables which are stated inclusive of GST. The net amount receivable (or payable) in respect of GST is included as part of other receivables (or other payables). The Net GST paid to, or received from the IRD, including the GST relating to investing and financing activities, is classified as an operating cash flow in the Statement of Cash Flows.

Income TaxThe NZSO is a public authority for the purposes of the Inland Revenue Acts. A public authority is exempt from income tax under the Income Tax Act 2007 and accordingly no provision has been made for Income Tax.

SPONSORS & fuNDING AGENCIESWe salute our corporate sponsors and funding agencies.

Their support for our combined vision ensures we continue playing music for the nation.

To share in our vision and discuss the many opportunities extended through corporate partnerships please call us on (09) 309 9767 or email [email protected]

PrinciPal ParTnErS ___

SPEcial Funding agEnciES ___

circlE ParTnErS ___

OvErTurE ParTnErS ___

cOncErTO ParTnErS ___

Ark Advance Auckland Live

Capitol CateringThe Cranfylde Charitable Trust

Hamilton City Theatres Interflora Pacific Unit Ltd

Interislander L’affare

Longitude 174Marsh

McLaren Associates LtdMulti Media Systems Ltd

Peter McLeavey GalleryPhantom Billstickers Ltd

Prescription Skin Care Sempre Avanti Consulting

Trinity College LondonZoë Smith for Tommy’s Real Estate

Wellington Regional Amenities Fund

Diessl Investments Ltd

Supported by the New Zealand government through

Printed by FORMAT PRINT

Wellington

Alcatel-Lucent House Level 8 13–27 Manners Street Wellington 6011

P O Box 6640 Marion Square Wellington 6141New Zealand

P 0800 479 674 (04) 801 2034 F (04) 801 7887 E [email protected] W nzso.co.nz

Auckland

Southern Cross BuildingLevel 359–67 High Street Auckland 1010

statement of performance expectations

Documents